The trouble with auctions — and I admit this may be a trigger response to the specific example of cell phone radio spectrum — is that the participants who have mountains of capital will use it to price out competitors and new upstarts.
They are different in that the company is still putting seats that can have passengers into the air. That’s the point of an airport, right? Flying people. If Lufthansa wants to spend money to fly 99% empty flights, the consumer still can hop on and fly places.
> the participants who have mountains of capital will use it to price out competitors and new upstarts.
Lufthansa's interest is piqued. They already price out competitors, they've bought many smaller airlines (even the "national" airlines Swiss and Austria) and operate them at slim to negative margins to keep the workers quiet (the threat of bankruptcy prevents them from rebelling too much)..
